AJCongress demise a tale of money, shifting priorities

Marc Stern, the legal counsel of the American Jewish Congress. (Courtesy of the American Jewish Congress)

NEW YORK (JTA) — After a death watch lasting nearly two years, news that the end of the American Jewish Congress was imminent set off a flurry of e-mails in the Jewish organizational world wondering if the nine-decade-old advocacy group indeed was shuttering its doors.

News of the demise was posted last Friday by eJewishPhilanthropy.com, a website focused on Jewish nonprofits.

“We have suspended most of our operations,” the organization’s co-executive director, Marc Stern, told JTA by phone last Friday, confirming that an organization that had been devastated by the Madoff scheme in December 2008 had laid off nearly all its remaining employees.

“Some things are continuing to go on because they are in process, and there are future activities a couple of months down the road,” Stern said, citing cash flow problems. “There are some other things floating around that can be done with minimal costs. I hope things will become very clear and we can discuss it in public.”

The AJCongress’ demise is a story not just about cash-flow problems but about the changing of priorities of the American Jewish community, organizational insiders said.

While the fulcrum was certainly the organization’s losses in the Madoff scandal — $21 million of its $24 million endowment disappeared in the scheme — the money woes laid bare the longstanding weaknesses that for years had made the AJCongress a junior sibling to larger Jewish advocacy organizations such as the American Jewish Committee and Anti-Defamation League.

“I think we had to find our voice in the community and in the arenas that were important; I don’t know that we did that very effectively,” AJCongress Chairman Jack Rosen, told JTA.

Others say privately that while the AJCongress was doing important work, focusing on issues of religious freedom in the United States, free speech and women’s rights, those simply did not resonate with donors who time and again have shown more interest in Israel and anti-Semitism.

Officially launched in 1922 by prominent Jews including Rabbi Stephen Wise and Supreme Court Justice Louis Brandeis, the AJCongress was established to be a democratic body that spoke for American Jews on a wide range of issues. At the time the AJCommittee, which had a similar mission, was seen as an elite bastion of German Jewish immigrants that was unresponsive to the broader Jewish community.

By the 1940s, the AJCongress was pioneering the model of using legal action to better Jews’ lives in America. In the 1960s, it took the lead role on behalf of the Jewish community in the legal fight for civil rights. In recent years it focused on securing the church-state divide in the United States, along with international issues such as helping refine Israel’s relationship with NATO and leading the legal fight against terrorists’ use of human shields.

The organization’s president, Richard Gordon, attributed the AJCongress’ fund-raising woes to a changing of priorities in the Jewish community that many organizations are feeling.

“The number of people who give to organizations like ours is dwindling,” Gordon said. “There is not a group of younger people who see these organizations as vital to American Jews.”

As the deepening recession prompted increased calls for the organized Jewish world to eliminate duplication and unnecessary bureaucracy by merging and contracting, the AJCongress became a prime example for the chopping block. Many suggested it be taken in either by the ADL or the AJC.

Those calls became louder in recent months as news surfaced that the AJCongress was considering merging with the AJC. Gordon says those talks continue and take place nearly every day. The AJC refused to comment.

Mission duplication aside, a shortage of cash was the precipitating event that led to the AJCongress closure. The Madoff losses erased the sum total of a bequest left to the organization by philanthropists Martin and Lillian Steinberg in 2001 — they were close with Madoff, according to the Forward. The losses also wiped out half of the remaining proceeds from the 2004 sale of the organization’s building on East 84th Street in Manhattan.

Until the middle of the 2000s, the AJCongress still was managing to raise between $3 million and $4 million per year from bequests and living donors. About a quarter of its budget came from endowments. But the pool simply dried up with the recession.

“There are some people who gave a lot of money, but over the last number of years that has not been very robust at all, even before Madoff,” Gordon said.

Immediately following the Madoff scandal, board member Jay Umansky issued a challenge to other board members to each contribute a low four-figure gift to help the AJCongress get back on its feet, according to several sources. But with a board comprised more of intellectual heavyweights than financial heavyweights, only a handful accepted the challenge.

It didn’t help that after the departure of the previous executive director, Neil Goldstein, in 2008, the board failed to hire a new CEO and instead had Stern and Matt Horn — the organization’s legal counsel and policy director, respectively — become co-executive directors while keeping their old roles. The two were meant to serve in their new executive positions on an interim basis, but the board never found a successor to Goldstein.

“This is about a vacuum of leadership,” one insider said. “That is what you are missing over here. It is about no cohesion that brought together contributors, programming and mission statement.”

While the AJCongress appears dormant for now, Stern and others are not closing the book completely. Several employees are still working, though it’s unclear if they are being paid.

“Maybe if money comes available, then we will pick up as resources pick up,” Stern said. “We have been wrestling with these problems for several months now and reached a point where we had to make a decision. At some point you just can’t continue with the resources available.”